Multiplė1) The theory that firms will be slow to change their products' prices in response to changes indemand because there are costs to changing prices is called:A. Transactions cost theoryB. Cost-benefit theoryC. Menu cost theoryD. Gift exchange theory2) In the Keynesian model, short-run equilibrium occurs:A. Where the IS and LM curves intersect.B. Where the IS curve, LM curve, and FE lines intersect.C. Where the IS curve intersects the FE line.D. Where the LM curve intersects the FE line.3) In the Keynesian model, an increase in government purchases affects output by:A. increasing labor supply, because workers feel effectively poorer.B. increasing saving to pay for future taxes, lowering the real interest rate and shifting the IScurve to the left.C. increasing the real interest rate due to crowding out, reducing aggregate demand.D. reducing the level of national savings in order to pay for the added spending, shifting the IScurve to the right.4) Keynesians believe that in the event of a recession, the government/central bank shouldconsider:A. increasing taxes.B. decreasing government spending.C. increasing the money supply.D. increasing the minimum wage.08.05) Suppose the government decided to tighten monetary policy and decrease governmentexpenditures. In the short run in the Keynesian model, the effect of these policies would be tothe level of output.A. decreaseB. have an ambiguous effect onC. increaseD. not impact

1.) The theory that the firms will be slow to change their prices in response to changes in demand…

Multiple 1) The theory that firms will be slow to change their products' prices in response to changes in demand because there are costs to changing prices is called: A. Transactions cost theory B. Cost-benefit theory C. Menu cost theory D. Gift exchange theory

Multiple 1) The theory that firms will be slow to change their products' prices in response to changes in demand because there are costs to changing prices is called: A. Transactions cost theory B. Cost-benefit theory C. Menu cost theory D. Gift exchange theory

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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